The Guardian view on Sir Philip Green and BHS: A huge wrong is partly righted
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Version 0 of 1. Would that Samuel Johnson had been alive this afternoon. The doctor who observed that “the gallows doth wonderfully concentrate the mind” would have had due occasion to update his aphorism. It has been over half a century since Britain sent a man to the gallows, but today’s action by Sir Philip Green shows that a tycoon’s mind can still be concentrated – only now it may require the threat of being stripped of one’s knighthood, losing one’s £100m superyacht and missing out on a front-row perch at London Fashion Week. All of these have been threatened in the long battle to get the former BHS owner to secure the collapsed retailer’s pension scheme. Precisely what effect was wrought by such menaces is for psychologists to decide, but this afternoon Sir Philip finally agreed to pay £363m into the BHS pension scheme. It has been a long journey for Sir Philip, the regulators, the MPs and the tens of thousands of BHS workers and pensioners. Children have had their teeth extracted with more grace and acceptance than the former BHS boss showed in facing up to his role in its demise. When summoned by MPs to explain how he came to flog one of the most famous businesses in Britain for a pound to an ex-bankrupt racing driver, Sir Philip first said he wouldn’t turn up, then demanded the resignation of Frank Field MP, the chair of the work and pensions select committee. When he eventually swapped Monte Carlo for a day at Westminster, he ordered another MP to stop staring at him and snarled his way through the entire session. When MPs found that he had “systematically plundered” the business, he got his lawyers to write a rebuttal. And even after promising to “sort” the pension scheme, his offers fell shy of a solution. Even the £363m slapped on the table today and hailed by Mr Field as an “out-of-court settlement” is over £200m short of the full BHS pension deficit. Reports have detailed how Sir Philip under-invested in BHS, even while pulling hundreds of millions of pounds out of it. He has been forced to apologise for his role in wrecking the business. Yet it has taken the combined force of two select committees, most of the press and a good deal of public repugnance to compel the multi-billionaire to plug part of the hole in the pension scheme. A rough kind of justice has been served, but it has taken monumental effort and too long – and it is still very partial. It is notable that no deal has yet been reached with Dominic Chappell, who bought the firm off Sir Philip. It is also true that the lawyers and bankers who took huge fees for advising him and Mr Chappell have largely evaded their fair share of blame. It is certainly the case that the wider business culture illustrated by BHS’s decline – ruinous loans from multinational financiers, bullying of suppliers, complacency and quiescence from highly paid company directors such as Lord Grabiner – have gone untackled. A lot has been achieved by striking this compromise, as thousands of BHS pensioners will doubtless feel. But BHS is not the only casualty of the bubble years; it merely ranks among the most high-profile. A more formal parliamentary system must be established that better holds businesses to democratic scrutiny. The drum roll effect of a select committee hearing can be powerful, but it is no match for routinely enforcing the social licence that all businesses in Britain must earn: on workers’ pay, on procurement and environmental standards and on being run for the long term. |